Exhibit 10.1 

[FORM
OF]
KRISPY KREME
DOUGHNUTS, INC. 
NONQUALIFIED
STOCK OPTION AGREEMENT 

     THIS NONQUALIFIED
STOCK OPTION AGREEMENT (this “Agreement”) is made as of [_____] (the “Grant Date”),
by and between Krispy Kreme Doughnuts, Inc., a North Carolina corporation having
its principal office at 370 Knollwood Street, Winston-Salem, North Carolina
27103 (the “Corporation”), and [_____] (the “Optionee”).


W I T N E S S E
T H: 

     WHEREAS, the Board
of Directors and shareholders of the Corporation have approved the Krispy Kreme
Doughnuts, Inc. 2000 Stock Incentive Plan (the “Plan”), for the purposes and
subject to the provisions set forth in the Plan; 

     WHEREAS, pursuant to
authority granted to it in the Plan, the Compensation Committee of the Board of
Directors of the Corporation (the “Committee”) has, on behalf of the
Corporation, granted to Optionee an option to purchase shares of the
Corporation’s Common Stock, no par value per share (the “Common Stock” or the
“Stock”), as set forth below; and

     WHEREAS, this Agreement
evidences the grant of such option pursuant to the Plan. 

     NOW, THEREFORE, in
consideration of the foregoing, of the mutual promises set forth below and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows: 

1. Summary of
Grant 

Number of Shares: [_____] 
Option Exercise
Price: [_____] 
Date of Grant: [_____] 

2. Grant of
Option 

     This Agreement sets
forth the terms of a nonqualified option granted to the Optionee to purchase
from the Corporation, during the period specified in Sections 3 and 4 of this
Agreement, a total of [_____] shares of Common
Stock, at the purchase price of [_____] per share (the
“Exercise Price”), in accordance with the terms and conditions stated in this
Agreement. The shares of Common Stock subject to the option granted hereby are
referred to below as the “Shares,” and the option to purchase such Shares is
referred to below as the “Option.” 

3. Vesting and
Exercise of Option 

     The Option shall
vest and become exercisable in increments in accordance with the schedule set
forth below, provided that the Option
shall vest and become exercisable with respect to an increment as specified only
if the Optionee has not incurred a Termination of Employment prior to the
vesting date with respect to such increment: 

     (a) no portion of the
Option shall vest or become exercisable prior to the first anniversary of the
Grant Date;




     (b) on the first
anniversary of the Grant Date one fourth of the number of Shares in the Option
(as indicated in Section 1) shall vest and become exercisable; 

     (c) on the second
anniversary of the Grant Date an additional one fourth of the number of Shares
in the Option (as indicated in Section 1) shall vest and become
exercisable;

     (d) on the third
anniversary of the Grant Date an additional one fourth of the number of Shares
in the Option (as indicated in Section 1) shall vest and become exercisable;
and

     (e) on the fourth
anniversary of the Grant Date the remaining one fourth of the number of Shares
in the Option (as indicated in Section 1) shall vest and become
exercisable.

     Notwithstanding the
vesting provisions described above, the Option shall vest and become exercisable
with respect to 100% of the Shares upon the Optionee’s Termination of Employment
if the Optionee’s Termination of Employment is due to his or her Retirement,
death or Disability. 

     The schedule set
forth above is cumulative, so that Shares as to which the Option has become
vested and exercisable pursuant to the provisions above may be purchased
pursuant to exercise of the Option at any date subsequent to vesting but prior
to termination of the Option. The Option may be exercised at any time and from
time to time to purchase up to the number of Shares as to which it is then
vested and exercisable. 

     The Option will
become vested and exercisable in full upon a Change in Control, provided that
Optionee has not incurred a Termination of Employment prior to the date of such
Change in Control. In the event of a Change in Control, the Board of Directors,
in its sole discretion, may send Optionee prior written notice of the
effectiveness of such event and the last day on which Optionee may exercise the
Option. In such event, Optionee may, upon compliance with all of the terms of
this Agreement and the Plan, purchase any or all of the Shares with respect to
which the Option is vested and exercisable on or prior to the last day specified
in such notice, and, to the extent the Option is not exercised, it shall
terminate at 5:00 P.M., Eastern Standard Time, on the last day specified in such
notice. For purposes hereof, Change in Control shall have the meaning set forth
in the Plan, except in the case of a transaction described in clauses (1) or (3)
of paragraph (b) of such definition, the consummation of such a transaction,
rather than the approval by shareholders of the Corporation of such transaction
or agreement to effect such a transaction, shall constitute a Change in Control.


4. Termination of
Option 

     Unless adjusted by
the Committee in its sole discretion, the Option shall remain exercisable as
specified in Section 3 above until 5:00 p.m., Eastern Standard Time, on the
earliest to occur of the dates specified below, upon which date the Option shall
terminate: 

     (a) the date all of the
Shares are purchased pursuant to the terms of this Agreement; 

     (b) upon the expiration
of 90 days following the Optionee’s Termination of Employment for any reason
other than his or her Retirement, death, Disability, or for Cause; 

     (c) upon the expiration
of 180 days following Optionee’s Termination of Employment on account of his or
her Disability; 

     (d) upon the expiration
of 360 days following Optionee’s Termination of Employment on account of his or
her death; 




     (e) immediately upon
Optionee’s Termination of Employment for Cause; 

     (f) on the last date
specified in the notice described in Section 3 above in the event of a Change in
Control;

     (g) on the ten year
anniversary of the Grant Date (the “Expiration Date”); or 

     (h) on the ten year
anniversary of the Grant Date in the event of the Optionee’s Termination of
Employment on account of Retirement. 

     Upon its
termination, the Option shall have no further force or effect and Optionee shall
have no further rights under the Option or to any Shares which have not been
purchased pursuant to prior exercise of the Option. 

5. Manner of
Exercise of Option 

     (a) Exercise. The Option may be
exercised only by (i) Optionee’s completion, execution and delivery to the
Corporation of a notice of exercise and (ii) the payment to the Corporation,
pursuant to the terms of this Agreement, of an amount equal to the Exercise
Price multiplied by the number of Shares being purchased as specified in
Optionee’s notice of exercise (the “Purchase Price”). Optionee’s notice of
exercise shall be given in the manner specified in Section 10 but any exercise
of the Option shall be effective only when the items required by the preceding
sentence are actually received by the Corporation. The notice of exercise shall
be in the form attached to this Agreement. Notwithstanding anything to the
contrary in this Agreement, the Option may be exercised only if compliance with
all applicable federal and state securities laws can be effected, with the
Committee being the final arbitrator thereof, in its sole and absolute
discretion, in the event of any dispute between the Corporation and the Optionee
with regard to the interpretation of such laws.

     (b) Form of
Payment. Payment of the
Purchase Price may be made (i) by check payable to the order of the Corporation
for an amount in U.S. dollars equal to the Purchase Price of such Shares; (ii)
by authorizing a third party to sell a portion of the Shares acquired upon
exercise of the Option and remit to the Corporation a sufficient portion of the
sales proceeds to pay the full Purchase Price; or (iii) by combining the above
methods. 

     (c) Issuance
and Delivery of Shares.
As
soon as practicable following receipt of such notice and payment, the
Corporation shall notify the Optionee of any payment required under subsection
(d) below. The Corporation shall deliver a certificate or certificates for the
Shares to the Optionee as soon as practicable after the Optionee has made any
payment required under subsection (d) below. Shares issued pursuant to the
exercise of this option will be issued only in the name of Optionee and may not
be transferred into the name of any agent of or nominee for Optionee until such
time as Optionee has complied with the terms of this Agreement. 

     (d) Withholding Obligation. Issuance of Shares
upon exercise of the Option shall be subject to the condition that the Optionee
shall pay to the Corporation, in addition to the Purchase Price, the minimum
amount the Corporation is required by law or regulation of any governmental
authority, whether federal, state or local, domestic or foreign, to withhold in
connection with such exercise of the Option, if any. In lieu of the payment
specified in this paragraph, Optionee may satisfy the obligation, in whole or in
part, by the methods specified in subsection (b) above. In addition, unless the
Committee determines otherwise and subject to such conditions as may be
established by the Committee, the Optionee may elect to satisfy the withholding
requirement, in whole or in part, by having the Corporation withhold shares of
Common Stock with a Fair Market Value equal to the minimum statutory tax
required to be withheld.




     (e) Deferral
of Issuance of Shares.
Anything in this Agreement to the contrary notwithstanding, if, at any
time specified herein for the issuance of Shares to Optionee, any law, or any
regulation or requirement of the U. S. Securities and Exchange Commission or
other governmental authority having jurisdiction over such matter shall require
either the Corporation or Optionee to take any action in connection with the
Shares then to be issued, the issuance of such Shares shall be deferred until
such action shall have been taken; the Corporation shall be under no obligation
to take such action; and the Corporation shall have no liability whatsoever as a
result of the non-issuance of such shares, except to refund to Optionee any
consideration tendered in respect of the Purchase Price. 

     (f) Stop
Transfer Instructions. The Corporation may
impose stop-transfer instructions with respect to any Shares (or other
securities) subject to any restriction set forth in this Agreement until the
restriction has been satisfied or terminates. 

6. Restrictions on
Transfer of Option 

     (a) Except as otherwise
provided in subsections (b), (c) and (d) below, the Option may not be sold,
exchanged, delivered, assigned, bequeathed or gifted, pledged, mortgaged,
hypothecated or otherwise encumbered, transferred or permitted to be
transferred, or otherwise disposed of, whether voluntarily, involuntarily or by
operation of law (including, without limitation, the laws of bankruptcy,
intestacy, descent and distribution or succession) or on an absolute or
contingent basis. For purposes of this Section, any reference to Optionee shall
(when applicable) be deemed to be and include references to Optionee’s estate,
executors or administrators, personal or legal representatives and transferees
(direct or indirect). 

     (b) If permitted by the
Committee, Optionee may transfer this Option to members of his or her Immediate
Family (as defined below), to one or more trusts for the benefit of such
Immediate Family members, to one or more partnerships where such Immediate
Family members are the only partners, or to one or more limited liability
companies (or similar entities) where such Immediate Family members are the only
members or beneficial owners of the entity, if (i) the Optionee does not receive
any consideration in any form whatsoever for such transfer, (ii) such transfer
is permitted under applicable tax laws, and (iii) if the Optionee is an
“Insider,” such transfer is permitted under Rule 16b-3 of the Securities
Exchange Act of 1934, as amended. For purposes hereof, “Immediate Family” means
the Optionee and the Optionee’s spouse, children and grandchildren. 

     (c) In the event of
Optionee’s death, the Option may be transferred to any executor, administrator,
personal or legal representative, legatee, heir or distributee of the estate of
Optionee. 

     (d) In the event of
Optionee’s divorce, Optionee may transfer some or all of the Option to his or
her former spouse incident to Optionee’s divorce from the former spouse.


     (e) As a condition
precedent to the transfer of the Option, each and every prospective transferee
shall (i) provide or cause to be provided to the Corporation, at its request,
sufficient evidence of the legal right and authority of such prospective
transferee to have the Option so transferred and (ii) comply with the provisions
of this Agreement. Any Option so transferred pursuant to this Section shall
continue to be subject to the same terms and conditions in the hands of the
transferee as were applicable to said Option immediately prior to the transfer
thereof, and any reference in this Agreement to the performance of services for
the Corporation by the Optionee shall continue to refer to the performance by
the transferring Optionee. 




7. Rights Prior to
Exercise 

     Optionee shall not
be deemed for any purpose to be a shareholder of the Corporation with respect to
any Shares as to which this Option shall not have been exercised and payment
made as hereby provided and a stock certificate for such Shares actually issued
to Optionee. No adjustment will be made for dividends or other rights for which
the record date is prior to the date of such issuance. 

8. Employment of
Optionee 

     Nothing in this
Agreement shall be construed as constituting a commitment, guarantee, agreement
or understanding of any kind or nature that the Corporation, any Subsidiary or
affiliate shall continue to employ Optionee, nor shall this Agreement affect in
any way the right of the Corporation, any Subsidiary or affiliate to terminate
the employment or other service of Optionee at any time and for any reason. By
Optionee’s execution of this Agreement, Optionee acknowledges and agrees that
Optionee’s employment or other service to the Corporation, any Subsidiary or
affiliate is “at will.” No change of Optionee’s duties with respect to the
Corporation, any Subsidiary or affiliate shall result in, or be deemed to be, a
modification of any of the terms of this Agreement. Optionee acknowledges and
agrees that the award and acceptance of the Option pursuant to this Agreement
does not entitle Optionee to future grants under the Plan or any other plan.


9. Burden and
Benefit 

     (a) This Agreement shall
be binding upon and inure to the benefit of any assignee or successor in
interest to the Corporation, whether by merger, consolidation or the sale of all
or substantially all of the Corporation’s assets.

     (b) This Agreement shall
be binding upon and inure to the benefit of Optionee and his or her legal
representative and any person to whom the Options may be transferred by will,
the applicable laws of descent and distribution, or otherwise in accordance with
the terms of the Plan. 

10. Notices 

     Any and all notices
under this Agreement shall be in writing, and sent by hand delivery or by
certified or registered mail (return receipt requested and first-class postage
prepaid), in the case of the Corporation, to its principal executive offices to
the attention of the Chief Financial Officer, and, in the case of Optionee, to
Optionee’s address as shown on the Corporation’s records. 

11. Specific
Performance 

     Strict compliance by
Optionee shall be required with each and every provision of this Agreement. The
parties hereto agree that the Shares are unique, that Optionee’s failure to
perform the obligations provided by this Agreement will result in irreparable
damage to the Corporation and that specific performance of Optionee’s
obligations may be obtained by suit in equity. 

12. Entire
Agreement 

     The parties hereto
agree that this Agreement sets forth all of the promises, agreements,
conditions, understandings, warranties, and representations between the parties
with respect to the Option and Shares and that there are no promises,
agreements, conditions, understandings, warranties, or representations, oral or
written, express or implied between the parties with respect to the Option and
Shares other than as set forth in this Agreement and in the Plan. Any
modifications or any waiver of any provision contained in this Agreement shall
not be valid unless made in writing and signed by the person or persons sought
to be bound by such waiver or modifications.




13. Severability 

     The provisions of
the Agreement are severable and if any one or more provisions are determined to
be illegal or otherwise unenforceable, in whole or in part, the remaining
provisions, and any partially unenforceable provision to the extent enforceable
in any jurisdiction, shall nevertheless be binding and enforceable. 

14. Waiver 

     The waiver by the
Corporation of a breach of any provision of this Agreement by the Optionee shall
not operate or be construed as a waiver of any subsequent breach by the
Optionee. 

15. Terms and
Conditions of Plan 

     The Option and the
terms and conditions set forth herein are subject in all respects to the terms
and conditions of the Plan (which are incorporated herein by reference). Except
as otherwise expressly set forth herein, the capitalized terms used in this
Agreement shall have the same definitions as set forth in the Plan. To the
extent that any conflict may exist between any term or provision of this
Agreement and any term or provision of the Plan, such term or provision of the
Plan shall control. 

16. Authority of
Committee 

     All determinations
made by the Committee with respect to the interpretation, construction and
application of any provision of this Agreement shall be final, conclusive and
binding on the parties. 

17. Covenants and
Representations of Optionee 

     Optionee represents,
warrants, covenants and agrees with the Corporation as follows: 

     (a) Optionee has not
relied upon the Corporation with respect to any tax consequences related to the
grant or exercise of this Option, or the disposition of Shares purchased
pursuant to its exercise. Optionee acknowledges that, as a result of the grant
and/or exercise of the Option, Optionee may incur a substantial tax liability.
Optionee assumes full responsibility for all such consequences and the filing of
all tax returns and elections Optionee may be required or find desirable to file
in connection therewith. 

     (b) Optionee will not
distribute or resell any Shares (or other securities) issuable upon exercise of
the Option granted hereby in violation of law. Optionee shall comply with all
provisions of the Corporation’s Securities Trading Policy, as in effect from
time to time. 

     (c) The agreements,
representations, warranties and covenants made by Optionee herein with respect
to the Option shall also extend to and apply to all of the Shares issued to
Optionee from time to time pursuant to exercise of the Option. Acceptance by
Optionee of any certificate representing Shares shall constitute a confirmation
by Optionee that all such agreements, representations, warranties and covenants
made herein continue to be true and correct at that time. 




     (d) As a condition to
receiving this award, Optionee agrees to abide by the Corporation’s Equity
Retention Policy, Compensation Recovery Policy and Stock Ownership Guidelines,
each as in effect from time to time and to the extent applicable to Optionee
from time to time. 

18. Limitation of
Liability 

     The liability of the
Corporation under this Agreement and in the award of the Shares hereunder is
limited to the obligations set forth herein with respect to such award, and
nothing herein contained shall be interpreted as imposing any liability in favor
of the Optionee or any others with respect to any loss, cost or expense which
Optionee or any others may incur in connection with or arising out of any
transaction involving the Shares.

19. Governing
Law 

     This Agreement shall
be governed by, construed and enforced in accordance with the laws of the State
of North Carolina, without giving effect to the conflict of laws provisions
thereof. 

20. Definitions 

     (a) “Retirement” shall mean the
Optionee’s Termination of Employment at a time when for an employee, the sum of
the Optionee’s age and years of employment with the Corporation, its
Subsidiaries and affiliates equals or exceeds 65. 

     (b) “Termination of Employment” means the
discontinuance of the Optionee’s service relationship with the Corporation and
its Subsidiaries, including but not limited to service as an employee of the
Corporation and its Subsidiaries, as a non-employee member of the board of
directors of the Corporation, or as a consultant or advisor to the Corporation
and its Subsidiaries. Except to the extent provided otherwise in an agreement or
determined otherwise by the Committee, a Termination of Employment shall not be
deemed to have occurred if the capacity in which the Optionee provides service
to the Corporation changes (for example, a change from consultant status to
employee status or vice versa) or if the Optionee transfers among the various
entities constituting the Corporation and its Subsidiaries, so long as there is
no interruption in the provision of service by the Optionee to the Corporation
and its Subsidiaries. Optionee shall not be deemed to have incurred a
Termination of Employment if the Optionee is on military leave, sick leave, or
other bona fide leave of absence approved by the Corporation of 180 days or
fewer (or any longer period during which the Optionee is guaranteed reemployment
by statute or contract.) In the event Optionee’s leave of absence exceeds this
period, he or she will be deemed to have incurred a Termination of Employment on
the day following the expiration date of such period.

21. [Forfeiture in
the Event of Competition and/or Solicitation or other
Detrimental
Acts]1

     In return for granting
the Option to Optionee, Optionee agrees to the following
restrictions:

     (a) Optionee expressly
agrees and covenants that during the Restricted Period (as defined below),
Optionee shall not, without the prior written consent of the Corporation,
directly or indirectly:

     (i) own, manage,
control, participate in, consult with, become employed by or otherwise render
services to any Competitive Business (as defined below) in the Territory (as
defined below), except that it shall not be considered a violation of this
clause for the Optionee to be a passive owner of not more than two percent of
the outstanding stock of any class of any corporation which is publicly traded,
so long as Optionee has no active participation in the business of such
corporation;
____________________

1 Section 21 is only included in the Nonqualified Stock Option Agreement
for persons holding the title of Senior Vice President or above of the
Corporation or of Krispy Kreme Doughnut Corporation, its wholly-owned
subsidiary. 




     (ii) induce or attempt to
induce any customer, supplier, client or other business relation of the
Corporation or its affiliates to cease doing business with the Corporation or
its affiliates if such cessation could reasonably be expected to result in
material harm to the Corporation; 

     (iii) induce or attempt to
induce any employee of the Corporation or its affiliates to leave the employ of
the Corporation or its affiliates, or in any way interfere with the relationship
between the Corporation or its affiliates and any person employed by them;
or

     (iv) violate the
Corporation’s Securities Trading Policy. 

     (b) Optionee expressly
agrees and covenants that Optionee will not, without the prior written consent
of the Corporation, directly or indirectly, disclose or use at any time before
or after Optionee’s Termination of Employment any Confidential Information (as
defined below) of which Optionee is or becomes aware, whether or not such
information is developed by Optionee, except to the extent such disclosure or
use is directly related to and appropriate in connection with Optionee’s
performance of duties assigned to Optionee by the Corporation or its affiliates.
Under all circumstances and at all times, Optionee will take all appropriate
steps to safeguard Confidential Information in his or her possession and to
protect it against disclosure, misuse, espionage, loss and theft.

     (c) If the Committee
determines that Optionee has violated any provisions of this Section 21 or that
Optionee’s employment has been terminated for Cause, then Optionee agrees and
covenants that: 

     (i) Optionee shall
automatically forfeit any rights Optionee may have with respect to the Option as
of the date of such determination; and 

     (ii) if Optionee has
exercised all or any part of the Option within the twelve-month period
immediately preceding a violation of this Section 21 or termination of
Optionee’s employment for Cause, upon the Corporation’s demand, Optionee shall
immediately deliver to the Corporation (A) any Shares acquired upon exercise of
the Option, if the Optionee still owns the Shares (at which time the Corporation
will deliver to the Optionee an amount equal to the Purchase Price for such
Shares), or (B) if the Optionee no longer owns the Shares, an amount equal to
the Gain realized by Optionee upon such exercise. For the purposes herein,
“Gain” shall be equal to the disposition price per Shares of any Shares sold or
disposed of, multiplied by the number of Shares sold or disposed of, minus the
Exercise Price paid for the Shares, and less any taxes paid which are not
refundable or for which the Optionee does not otherwise receive a tax credit or
other form of reimbursement.

     (d) Definitions. For purposes of
this Section 21, the following definitions shall apply: 

     (i) “Competitive Business” means any business
listed on Exhibit A hereto. 

     (ii) “Confidential Information” means information
that is not generally known to the public and that was or is used, developed or
obtained by the Corporation or its affiliates in connection with the business of
the Corporation or its affiliates and which constitutes trade secrets or
information which they have attempted to protect, which may include, but is not
limited to, trade “know-how,” customer information, supplier information, cost
and pricing information, marketing and sales techniques, strategies and
programs, computer programs and software and financial information. It shall not
include information (a) required to be disclosed by court or administrative
order; (b) lawfully obtainable from other sources or which is in the public
domain through no fault of Optionee; or (c) the disclosure of which is consented
to in writing by the Corporation.




     (iii) “Restricted Period” means the period
during which Optionee is employed by the Corporation or an affiliate and twelve
months following the date that Optionee ceases to be employed by the Corporation
or an affiliate for any reason whatsoever.

     (iv) “Territory” means: 

     (A) The entire United
States and any other country where the Corporation or any of its Subsidiaries,
joint venturers, franchisees or affiliates has operated a retail facility at
which the Corporation’s products have been sold at any time in the one-year
period ending on the last day of Optionee’s employment with the Corporation or
its affiliates; 

     (B) In the event that
the preceding clause shall be determined by judicial action to define too broad
a territory to be enforceable, then “Territory” shall mean the entire United
States;

     (C) In the event that
the preceding clauses shall be determined by judicial action to define too broad
a territory to be enforceable, then “Territory” shall mean the states in the
United States where the Corporation or any of its Subsidiaries, joint venturers,
franchisees or affiliates has operated a retail facility at which the
Corporation’s products have been sold at any time in the one-year period ending
on the last day of Optionee’s employment with Corporation or its
affiliates; 

     (D) In the event that
the preceding clauses shall be determined by judicial action to define too broad
a territory to be enforceable, then “Territory” shall mean the area that
includes all of the areas that are within a 50-mile radius of any retail store
location in the United States at which the Corporation’s products have been sold
at any time in the one-year period ending on the last day of Optionee’s
employment with the Corporation or its affiliates; and

     (E) In the event that
the preceding clauses shall be determined by judicial action to define too broad
a territory to be enforceable, then “Territory” shall mean the entire state of
North Carolina. 

     (e) The Corporation may
require Optionee, in connection with the exercise of the Option, to certify in a
manner acceptable to the Corporation that Optionee has not violated the terms of
this Section 21 and may decline to give effect to such exercise if Optionee
fails so to certify. If Optionee is required to repay any Option Gain to the
Corporation pursuant to this Section 21, Optionee shall pay such amount in such
manner and on such terms and conditions as the Corporation may require, and the
Corporation shall be entitled to withhold or set-off against any other amount
owed to Optionee by the Corporation or any of its affiliates (other than any
amount owed to Optionee under any retirement plan intended to be qualified under
Section 401(a) of the Code (as defined herein)) up to any amount sufficient to
satisfy any unpaid obligation of Optionee under this Section 21.




     (f) Optionee
acknowledges and agrees that the period, scope and geographic areas of
restriction imposed upon Optionee by the provisions of Section 21 are fair and
reasonable and are reasonably required for the protection of the Corporation. In
the event that any part of this Agreement, including, without limitation,
Section 21, is held to be unenforceable or invalid, the remaining parts of
Section 21 and this Agreement shall nevertheless continue to be valid and
enforceable as though the invalid portions were not a part of this Agreement. If
any one of the provisions in this Section 21 is held to be excessively broad as
to period, scope and geographic areas, any such provision shall be construed by
limiting it to the extent necessary to be enforceable under applicable law.


     (g) Optionee
acknowledges that breach by Optionee of this Agreement would cause irreparable
harm to the Corporation and that, in the event of such breach, the Corporation
shall have, in addition to monetary damages and other remedies at law, the right
to an injunction, specific performance and other equitable relief to prevent
violations of Optionee’s obligations hereunder.

22. [Holding Period
After Resignation or Termination]2


     In return for
granting the Option to Optionee, Optionee agrees that in the event of Optionee’s
Termination of Employment in a manner that would otherwise permit Optionee to
exercise Optionee’s options to purchase Common Stock after leaving employment by
the Corporation, Optionee will nevertheless delay making any transactions in the
Corporation’s stock until such time as the Corporation has filed its next
succeeding quarterly (10-Q) or annual (10-K) financial filing, as applicable,
with the U.S. Securities and Exchange Commission. 

23. [Confidentiality]3


     Optionee agrees to
maintain the existence and terms of this Agreement, including the number of
Shares in the Option granted hereunder, as confidential, and neither Optionee
nor any person acting on his or her behalf shall disclose the terms of this
Agreement to any third party, other than to Optionee’s attorney, accountant,
members of Optionee’s immediately family or as required by law. In certain
instances, the Corporation may be required by securities regulations or other
laws to disclose information about this award and even the full content of this
Agreement. In the event Optionee breaches the terms of this confidentiality
provision, the Option granted hereunder shall be immediately forfeited.

____________________

2 Section 22 is only included in the Nonqualified Stock Option Agreement
for persons holding the title of Senior Vice President or above of the
Corporation or of Krispy Kreme Doughnut Corporation, its wholly-owned
subsidiary. 
3 Section 23 is not
included in the Nonqualified Stock Option Agreement for Executive
Officers/Section 16 reporting persons of the Corporation. 




     IN WITNESS WHEREOF,
the Corporation and Optionee have executed this Agreement hereto as of the day
and year first above written. 


	KRISPY KREME
      DOUGHNUTS, INC.  
	 
	 
	By: 
    	 
	Title: 
    	 
	  
	 




	OPTIONEE  
	 
	 
	Signature: 
    	 
	Printed
      Name:  	 







Exhibit
A 

The following businesses, together with their subsidiaries, are the
businesses for purposes of this Agreement:

Dunkin Brands Inc. 
Tim Hortons, Inc. 
George Weston Limited

Interstate Bakeries Corporation 
Flowers Foods, Inc.
McKee Foods Inc.

Starbucks




STOCK OPTION
EXERCISE FORM 

This form must be completed and returned to Krispy Kreme’s Chief
Financial Officer on or before 1:00 p.m. Eastern Standard Time on date of
exercise. 

	NAME (please
      print):  	SOCIAL
      SECURITY NO.:  
	  	
	 	
	SECTION
      I  	  
	 	
	HOME
      ADDRESS:  	WORK
      ADDRESS:  
	  	
	 	
	HOME
      TELEPHONE:  	WORK
      TELEPHONE:  
	 	



SECTION II: I
wish to exercise the following options: 

	A 	B 	C 	D 
	  	NUMBER
      OF 	EXERCISE 	TOTAL PURCHASE PRICE: 
	    GRANT DATE  	OPTIONS 	PRICE 	(COLUMN B
      x COLUMN C) 
	  	 	 	 
	  	 	 	 
	  	 	 	 
	  	 	 	 
	    TOTAL  	   	   	   



	SECTION
      III  	SECTION
      IV  
	I elect to pay
      for my shares (check one):  	I elect to pay
      my taxes on this transaction  
		  	(check
      one):  
	 	     
	c	     Broker assisted Cashless
Exercise	c	     Sell shares to cover taxes (Broker
      assisted
		  		     Cashless Exercise)
		   
	c	     Cash Purchase by Check (payable
    to	c	     Check (payable to Krispy Kreme Doughnuts,
      Inc.)
		     Krispy Kreme Doughnuts, Inc.)		  
		  	c	     Share withholding
				  
				 



	Signature  	                   
       	Date of Exercise  



	Return  	KRISPY KREME
      DOUGHNUT  
	form
      to:     	CORPORATION  
	 	ATTN: Chief
      Financial Officer  
	  	P.O. Box
      83  
	  	Winston-Salem,
      NC 27102  
		Phone:
      336-725-2981